Prime Life Insurance: Rs 23.64 crore in shareholder's fund, AGM in near future
Wed, Jan 20, 2016 3:09 AM on Latest, Exclusive, Dividend, Bonus & Rights, AGM/Special AGM,
Prime Life Insurance Co. Ltd. (PLIC) is one of the promising stocks in the secondary market of Nepal. PLIC is yet to convene its Annual General Meeting (AGM) since the fiscal year 2069/70. Investors are expecting PLIC to convene the AGM with high dividend in near future.
Three months ago, on October 19, 2015, the closing price of shares of PLIC stood at Rs 1310/unit. The last traded price of PLIC stands at Rs 1655/unit. In a intraday trading yesterday, January 19, 2016, the opening price of PLIC was Rs 1634/unit where as the lowest and highest trading price for the day were Rs 1584/unit and Rs 1660/unit respectively. Yesterday, 13,431 units of PLIC worth Rs 2.18 crore was traded in the secondary market.
With such volatile share price of PLIC, ShareSansar has analyzed the fundamentals of PLIC from Q1 of last fiscal year to the Q1 of the current fiscal year. Let's begin with the investor's favorite, the Shareholders' fund.
It is no hidden fact that the PLIC has not given any dividend for last three years. The following table depicts the current capacity of Shareholder's fund of PLIC:
| Figure in Rs ('000) | |
| Profit in Q4 2069/70 | 126,237 |
| Profit in Q4 2070/71 | 97,231 |
| Profit in Q4 2071/72 | 72,088 |
| Total | 295,556 |
| Less 20% for general reserves | 59,111 |
| Total Profit available for shareholder's fund | 236,445 |
| Less: TDS @ 5% Bonus | 11,822 |
| Net Profit available for shareholder's fund | 224,623 |
| Current Paid up capital | 448,160 |
Looking at the table the PLIC can distribute maximum of 50.12 % of dividend. It is highly likely that PLIC will distribute a dividend in the range from 35% to 45%.
The possible requirement, in near future, for insurance companies to increase their paid up capital may trigger right shares from this company. If we look at the trend among insurance companies for past few years, most of the insurance companies have come up with at least 1:1 right shares. As PLIC has not come up with dividend or right shares for past three years, investors are also expecting a right issue comparable to the industry wide standard.
Comparison of Fundamentals of PLIC from Q1 of FY 2071/72 to Q1 of FY 2072/73
Premium Collection for the past three fiscal year
